How to Register a Company in India? – Advantages of Company Registration in India
Do you want to start a business in India but are having trouble registering one? Don’t worry, this article will provide you with all of the information you need to know about how to register a company in India, the company registration process, Advantages of Company Registration, and other compliance requirements that must be met when opening a company in India.
A Briefing on ‘How to Open a Company?’
Forming a Private Limited Company is one of the most generally recommended ways to start a business in India. This type of business gives stockholders limited responsibility as well as ownership restrictions. An LLP (Limited Liability Partnership) is a business that is owned and operated by a group of partners. Directors and stockholders maybe different in a Private Limited Company Registration.
Basic Requirements for Company Registration Process in India
- Your company’s name must be distinct. Any existing companies or trademarks in India should not be confused by the suggested name.
- The registered office of a business does not have to be a commercial location. An NOC from the landlord is required to use a rental property as the registered office.
- There must be at least two directors in a private limited corporation, with a maximum of 15. At least one of the company’s directors must be an Indian citizen.
- There is no requirement for a firm to have a certain amount of capital. A company’s authorised capital should be at least one lakh rupees.
Advantages of Company Registration in India by Foreigner
There are numerous advantages to forming a business. Your company’s legitimacy will be enhanced if it is registered. It benefits your company in the following ways:
- Protects you from personal liability as well as other risks and losses.
- Increase the number of customers you have
- With ease, obtain bank credits and good investments from reputable investors.
- Protects your company’s assets by providing liability protection.
- Increased capital contribution and stability
- Enhances the company’s ability to expand and grow large.
Comparison between the different Business Structure in India
Private Limited Company |
Sole Proprietorship |
Limited Liability Company |
Partnership Firm |
One Person Company |
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The Companies Act, 2013, will be used to register a private limited company with the Ministry of Corporate Affairs. |
There is no formal registration is required in Sole Proprietorship. |
The LLP Act 2008 will be used to register it with the Ministry of Corporate Affairs. |
A business can be either registered or unregistered. It is optional to register a partnership. Partnership is enrolled under the Partnership Act of 1932 whenever it is enrolled. |
The Companies Act, 2013, will be used to register a one-person company with the Ministry of Corporate Affairs. |
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The Companies Act of 2013 defines a Private Limited Company as a separate legal entity. A Private Limited Company’s Directors and Shareholders are not personally liable for the company’s debts. |
Proprietorship is not seen as a separate legal entity, and the advertiser is truly liable for the Proprietorship’s liabilities. |
The Promoter’s choice of name should be confirmed by the Company’s Registrar. Only names that are not indistinguishable from the name of an existing company or LLP, as well as names that are not antagonistic or illegal, would be acceptable. The entity’s name will include the phrases “Restricted Liability Partnership” or “LLP” at the end. |
The name chosen by the Promoters might be used for the Partnership. It is not necessary to obtain permission to use a name; however, it is a good idea to keep a strategic distance from reserved names. |
The Promoter’s decision on a name should be confirmed by the Company’s Registrar. Only names that are not indistinguishable from the name of an existing company or LLP, as well as names that are not antagonistic or illegal, would be acceptable. The substance’s name will end with the letters “OPC,” which stands for “One Person Company.” |
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The Promoter’s choice of name should be confirmed by the Company’s Registrar. Only names that are not indistinguishable from the name of an existing company or LLP, as well as names that are not antagonistic or illegal, would be acceptable. The substance’s name will conclude with the words “Private Limited Company.” |
The Proprietorship can be named after the Promoter’s choice of name. It is not necessary to obtain permission before using a name; however, it is good practice to avoid using reserved names. |
A limited liability partnership (LLP) is a separate legal entity registered under the LLP Act of 2008. A LLP’s partners are not automatically liable for the LLP’s obligations. |
Partnership is not seen as a distinct legal entity, and the advertisers are truly liable for the organization’s responsibilities. |
Under the Companies Act of 2013, a one-person company is a separate legal entity. A One Person Company’s Director and Nominee Director are not personally liable for the company’s liabilities. |
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The maximum number of investors or persons in a Private Limited Company is 200. |
The proprietor has unlimited liability and handles all of the proprietorship’s responsibilities. |
A limited liability partnership (LLP) is a separate legal entity registered under the LLP Act of 2008. A LLP’s partners are not automatically liable for the LLP’s obligations. |
Partners are exposed to unlimited risk and are responsible for the Partnership’s whole liability. |
Foreigners are not permitted to serve as Chief and Nominee Director. |
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Investors have limited responsibility and are only liable up to the value of their shares. |
In Sole Proprietorship, a single individual will be considered as a member of an organization |
Only with the approval of the Reserve Bank of India and the Foreign Investment Promotion Board (FIPB) is it possible for outsiders to invest in an LLP. |
To start a partnership, you’ll need at least two persons. |
To start a One Person Company, you’ll need at least two people: a Chief and a Nominee Director. |
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In certain places, foreigners are eligible to invest in a Private Limited Company under the Automatic Approval procedure. |
A Proprietorship cannot be started by a foreigner. |
Accomplices have limited liability and are only at risk to the extent of their commitment to the LLP. |
The smallest number of accomplices possible is 20. |
The responsibility of a director and a nominee director is limited to the amount of his or her offer capital. |
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To start a Private Limited Company, you’ll need at least two people. |
A single person can be a member of the group. |
A limited liability partnership (LLP) can have an unlimited number of partners. To start an LLP, you’ll need at least two people. |
A partnership cannot be started by a foreigner. |
A One Person Company (OPC) can be made up of only two people: the CEO and a Nominee Director. |
Documents required for Company Registration Process in India
For Indian Nationals to Register a Company in India:
- PAN Card copy of the proposed Directors
- Address proof of the directors such as Passport/ Voter ID/ Ration card / Electricity bill / Aadhar card
- Residential proof for e.g. Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill etc
- Registered office proof
- Proof of evidence of any utility service like telephone, gas, electricity, etc. for office premises
- Identity and address proof of shareholders
- MOA and AOA
For Foreign Nationals to Register a Company in India:
- Copy of Passport (Notarized or Apostille)
- Address proof of the directors such as Driving License, Residence Card, Bank Statement, Government issued form of identity containing address
- Residential proof for e.g. Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill etc
- Registered office proof
- Proof of evidence of any utility service like telephone, gas, electricity, etc. for office premises
- Identity and address proof of shareholders
- MOA and AOA
Suggested Read: GST Registration Process for Foreigners and Eligibility Criteria
How to Register a Company in India?
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Get DSIC
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Apply for the DIN (Digital Identification Number)
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Apply for the Name Availability
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Submission of a document such as MOA and AOA
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Fill in all the details in Form Spice+
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Registrar of Company will issue a Certificate of Incorporation with PAN and TAN
FAQs on Company Registration in India
1. How can I set up a business in India?
The default option is to incorporate a business using the Simplified Proforma for Incorporating Company electronically (Spice+), with eMoA (INC-33), and eAOA (INC-34), and most companies are obliged to use SPICe solely.
2. Is it possible for a director of a Private Limited Company to be paid?
In a LLP, or OPC (One Person Company), Private Limited Company, a salaried person can become a director. It is necessary to review the employment agreement to see if such restrictions are permitted. In many circumstances, companies are unconcerned about their employee’s position as a director of another company.
3. Is it necessary to be present in person while forming a private limited company?
The entire process is completed online, and you do not need to be present at our office or any other location to complete it. The documents need to be scanned and mailed. The firm incorporation certificate is sent by courier from the MCA to the business address.
4. What is the number assigned to a company’s registration application?
A system-generated number assigned to an applicant for Name Reservation/Company Incorporation is referred to as an Application Number.
5. What is the difference between SPICe and SPICe+ [Previous Company Incorporation Form]?
SPICe is an e-form, and SPICe+ is an integrated Web form that provides ten services from three Ministries and Departments of the Central Government.
6. What if my business name is already taken?
You’ll need to go to the Ministry of Corporate Affairs (MCA), which keeps track of registered company names, and see if yours is already there. If your firm’s name shows in the company registration directory, you will need to change it. If you have already submitted an application, you will need to submit another one for a new name that has not been registered yet.
Conclusion
If you want to register a startup or a new company in India, you must first register it with the Ministry of Corporate Affairs in India (MCA). It is not necessary to go to the corporate office to register because it maybe done from the comfort of one’s own home. The registration process comprises obtaining a Digital Signature Certificate (DSC), obtaining a Director Identity Number (DIN), and submitting an electronic form.
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